Table 7-7
-Refer to Table 7-7. You have an extra ticket to the Midwest Regional Sweet 16 game in the men's NCAA basketball tournament. The table shows the willingness to pay of the four potential buyers in the market for a ticket to the game. You hold an auction to sell the ticket. Michael bids $410 for the ticket, and you sell him the ticket. What is his consumer surplus?
A)$410
B)$90
C)$10
D)$0

Question

Table 7-7 
-Refer to Table 7-7. You have an extra ticket to the Midwest Regional Sweet 16 game in the men's NCAA basketball tournament. The table shows the willingness to pay of the four potential buyers in the market for a ticket to the game. You hold an auction to sell the ticket. Michael bids $410 for the ticket, and you sell him the ticket. What is his consumer surplus?
A)$410 
B)$90 
C)$10 
D)$0

Quizplus · Accepted Answer

To calculate Michael's consumer surplus, we need to find the difference between his maximum willingness to pay (MWTP) and the actual price paid, which is $410. Michael's MWTP is $500, which is the highest among all the potential buyers. Therefore, his consumer surplus is $500 - $410 = $90. The other potential buyers have either not bid as high as Michael or have been outbid, so their consumer surplus is $0.

Table 7-7 -Refer to Table 7-7. You Have an Extra Ticket to Extra